Pelosi Hints Obama Will Get His $350 Billion TARP Request

Jan. 14, 2009— -- House Speaker Nancy Pelosi, D-Calif., indicated today that Congress would approve President-elect Barack Obama's request for another $350 billion in bailout funds, because this time it will spent by "a president who'll enforce the law."

Pelosi did not, however, come right out and say that Congress would approve Obama's request for the money, and the vote is expected to be close.

The congressional head count on the vote's prospects are so close that Obama made a personal lobbying trip to Capitol Hill Tuesday, where he issued his first veto threat, before he even takes the Oath of Office.

The force of that threat will be tested as early as Thursday when the Senate is expected to vote on the money. Democrats believe they have a slim margin for approval in the Senate, so top Obama aides Larry Summers and Rahm Emanuel were back on the Hill today to lobby Republicans.

Democrats say they are looking for at least 10 Republicans to support releasing the money.

It's an even tougher sell in the House where the request has a good chance of being rejected.

To block Obama's request, both the House and Senate must vote to withhold the money. If they force an Obama veto, Congress would need a two-thirds majority vote to prevent him from spending it.

If Obama needed any help persuading Congress that the economy needed help, it came in the latest string of downbeat economic reports. Today's bulletin was from the Commerce Department, which reported that retail sales plunged far more than expected in December, a record sixth-straight monthly decline.

Anger Over TARP Spending

The anger over how the first $350 billion of Trouble Asset Relief Program funds was allocated is felt by both Democrats and Republicans.

The Bush administration argued that TARP was needed to buy up useless mortgages that were bogging down the economy but then switched tactics and sent the money straight to distressed banks, compounding the inherent reluctance of many lawmakers to spend billions on Wall Street.

Congress later discovered that the banks weren't required to account for how the money was spent and that some of the cash was used for executive bonuses.

And Republicans were particularly incensed that more than $17 billion went to bail out Detroit's auto giants.

Pelosi told "Good Morning America" today that if the money is approved it would be because Obama had promised the money would be tracked, executive bonuses would be eliminated for companies that accept federal funds, and the money would be used to help homeowners as well as banks.

She said Congress was furious, but also felt helpless, at the way the Bush administration had spent the first half the TARP allocation.

"The next thing we could do is go down to Pennsylvania Avenue with a set of handcuffs and say to them, 'You're no longer to enforce this law because you're not doing it right,'" Pelosi told "GMA."

Obama Seeking More Than $1 Trillion for Economy

"You don't expect to give somebody tens of billions of dollars and say, 'Don't tell me how you're going to spend it,'" she said.

"Things will be different," Pelosi said of the second round of TARP spending, "because we will have a president who will enforce the law, and with the light of transparency, that will be built into any new law -- if there is to be any more TARP funding."

Democrats, who control Congress, also seek assurances that a sizable amount of the money will be allocated to help homeowners avoid foreclosure. In the House, Democrats are drafting legislation that would dedicate a minimum of $40 billion to that effort.

The TARP money is just a downpayment on bailout funds the Obama administration will ask Congress to approve. The president-elect's economic team is hammering out a massive stimulus plan that will include tax cuts, bailout funds and public works projects expected to cost around $775 billion.

Obama is scheduled to travel to a factory in Ohio Friday in an effort to highlight the need for the massive stimulus package.

Together with the TARP request, Obama seeks more than $1 trillion to help stabilize the nation's economy.

ABC News' Zach Wolf contributed to this report; This story has been corrected to reflect Pelosi's title as House Speaker.